China warns of retaliation if US takes more trade steps

China's top envoy called on the United States to remain "cool-headed" Thursday as Washington threatened to raise the tariff rate on the next $200 billion of Chinese imports.

There are also reports that representatives of U.S. Treasury Secretary Steven Mnuchin and Chinese Vice Premier Liu He are having private conversations as they too look to reengage in negotiations.

Investors in global markets appeared to have decided that China was most at risk in the event of a fully fledged trade war.

" The US is playing a carrot-and-stick tactic on China, but this approach is not going to work on China", the Ministry said.

"If the U.S. takes measures to further escalate this situation, we will surely take counter-measures to firmly uphold our legitimate rights and interests", he told a regular briefing.

"I need to stress that dialogues must be conducted on the basis of mutual respect and equality", he said. History nearly guarantees that consumers will be picking up the tab for the US-Chinese trade dispute.

The government will seek public comment on the idea.

Wang said Beijing recognizes that the US side was trying to put pressure on China.

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"China's trade abuses need to be addressed, but tariffs are not the answer", the National Retail Federation said.

On July 10, Washington unveiled a list of another $200 billion in Chinese goods, from areas as varied as electrical machinery, leather goods and seafood, that would be hit with 10 per cent import duties. "Nor did it make concerted efforts with China".

The administration is considering more than doubling planned tariffs on $200 billion in Chinese imports, people familiar with the deliberations told Bloomberg.

Wang Yi said at a forum in Singapore that a US campaign to ratchet up pressure on Beijing will not "have any effect", Reuters reported.

One person familiar with the internal deliberations said the U.S.is trying to secure certain concessions and if China agrees, it is possible the US would back off additional tariffs.

The U.S. has said a second round on 16 billion dollars in Chinese imports could be implemented soon. That case concluded China was stealing American technology and tariffs were needed to offset the damage.

The Chinese have already proposed buying more US goods in order to settle the dispute, only to have the White House-which wants to win a broader argument about intellectual property and subsidies-reject the proposal. Beijing has warned of an immediate mirror response.

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